Albert H. Kritzer, 1928-2010

My recent posts about the status of the CISG and CUECIC and the possible CISG implications of the McDonald's glassware recall sent me, as is almost always the case when I want to refresh my recollection of CISG text or catch up on recent cases and commentary, to the Pace Law School Institute of International Commercial Law's expansive, free, and always helpful online CISG Database.

Revisiting the site yesterday, I read the sad news that Albert H. Kritzer, the Institute's founder and godfather of the CISG Database, passed away June 1, while in Egypt to receive the 2010 Arab Conference for Commercial and Maritime Law Career Achievement Award. Pace Law School's notice, including comments from Dean Michelle Simon, is available here.

I met Al Kritzer only once, and briefly, in person, during a break in a conference at Pace Law School that his colleague Jim Fishman hosted commemorating Wood v. Lucy, Lady Duff-Gordon. However, Al and I corresponded (mostly by e-mail) and he was kind enough to introduce me (again, via e-mail) to Joseph Lookofsky (another CISG luminary) and to introduce much of the domestic and international CISG community (via the CISG Database) to my work analyzing the then-entire corpus of published U.S. CISG case law in the chapter on the CISG that I comprehensively revised and greatly expanded a few years ago for Howard O. Hunter's Modern Law of Contracts. Al subsequently invited me to contribute substantive case commentaries to the CISG Database, in which I have been largely remiss for a variety of reasons. I hope that his successor will allow me to honor Al's invitation -- and his life's work.

Would you like some cadmium with your soft drink?

Yesterday, the Consumer Product Safety Commission (CPSC), in conjunction with fast-food giant McDonald’s®, voluntarily recalled about 12 million Shrek Forever After™ collectible drinking glasses sold or awaiting sale at McDonald’s® locations throughout the U.S. after someone in Representative Jackie Speier's (D-CA) office alerted the CPSC that the movie-character illustrations on the glasses contained cadmium, prolonged exposure to which may pose a serious long-term health risk.

Millville, NJ-based Durand Glass Manufacturing Co. (DGMC), a subsidiary of Arques, France-based Arc International, manufactured the movie-themed glasses, which another Arc International subsidiary, Millville-based Arc International North America, distributed exclusively to McDonald's. McDonald's locations nationwide sold the glasses in May and early June 2010.

McDonald's web site addresses the recall through a series of FAQs (and answers). (For the benefit of those with short attention spans, every answer to which the statement would be germane includes the statement "the CPSC has said the glassware is not toxic.") Arc International deployed a press release. Representative Speier posted a statement on her web site, which also includes a link to a Los Angeles Times article about the recall. Only DreamWorks™ appears to be mum on the subject -- so far, at least. (Perhaps the Shrek-iverse's creators didn't retain all of the product licensing-rights like George Lucas did, not so long ago and not so far away, with the original Star Wars™ trilogy or they made McDonald's pay a non-refundable lump sum to market the glassware.) Rumors of a replacement glass featuring an image of McDonald's CEO Jim Skinner that transmogrifies into a Shrek-alike when filled with any non-Coca-Cola® brand soft or sport drink appear to be completely unfounded.

All fun aside, why is a commercial law blog interested in allegedly cadmium-contaminated glassware products introduced into the stream of commerce without any warning about or disclaimer regarding the possibility that they might contain an alleged carcinogen?

If this were a tort law or products liability blog, we might opine about the inevitable class-action product liability lawsuit against some combination of McDonald's, Arc International, Arc International North America, Durand Glass Manufacturing Co., the as-yet undisclosed supplier(s) of the cadmium-contaminated paint or other ingredient Durand used to commemorate Shrek™, Fiona™, Donkey™, and Puss in Boots™ (okay, Puss is probably not trademarked, given that the character's name dates from the late Seventeenth century, but we want to minimize our exposure to IP liability because most of us teach at public universities and neither we nor our employers can afford, in the current fiscal climate, to defend any infringement claim that survives a Rule 12(b)(6) motion) on the glassware (and, perhaps, DreamWorks -- for making a movie about which McDonald's predicted sufficient interest that it undertook to procure the offending glassware for resale).

If this were a civil procedure blog we might weigh whether the terms and conditions (no doubt, conveniently located somewhere on the Internet) purportedly governing McDonald's sale of the collectible glassware unconscionably compel non-class arbitration (assuming facts not in evidence) in light of the Supreme Court's recent grant of certiorari in AT&T Mobility LLC v. Concepcion, No. 09-893 (cert. granted May 24, 2010), about which my friend and UNLV colleague Jean Sternlight and my friend and ContractsProf Blog colleague Meredith Miller have recently blogged here and here, respectively.

If this were a consumer law blog, we might wring our hands or cluck our tongues at yet another clear example of Corporate America's crass exploitation of our children and squeeze-the-last-penny sellers who outsource production of low-priced, lower-cost consumer goods to Third World outposts like ... New Jersey. (Just kidding, Jay.)

But, again, what's the commercial law angle on collectible glassware manufactured for and sold to McDonald's for resale to McDonald's retail customers?

It should go without saying that the most interesting legal issues arising out of this scenario involve (1) what express and implied UCC Article 2 warranties each seller in the chain from DGMC (or DGMC's ingredient supplier) to McDonald's made to anyone who purchased or used the glassware; (2) to what extent, if any, each seller in that chain may have disclaimed some or all of its warranty liability, limited the remedies available to the buyer, user, or other person affected by the glassware's use, or both; (3) whether one or more warranty-making sellers breached one or more warranties to one or more buyer, user, or other person affected by the glassware's use; and (4) what remedies Article 2 affords any person to whom any seller is liable for breach of warranty.

For those wanting to add some international spice to the mix, the CBC reports here that the recall has spread to include all Canadian McDonald's restaurants. Information from the Associated Press and Reuters, reported here, indicates that recalling the glassware sent to Canadian McDonald's restaurants raises the total number of recalled glasses to 13.4 million. Both the U.S. and Canada are parties to the U.N. Convention on Contracts for the International Sale of Goods (CISG). To the extent that the Canadian McDonald's restaurants purchased their Shrek Forever After™ collectible glassware from New Jersey-based DGMC or New Jersey-based Arc International North America, that transaction constituted a sale of specially-manufactured goods (CISG art. 3(1)), purchased for resale, rather than personal, family, or household use (CISG art. 2(a)), by a buyer located in one CISG "contracting state" from a seller located in a different "contracting state" (CISG art. 1(1)(a)). Therefore, unless the Canadian McDonald's buyers and New Jersey-based DGMC or New Jersey-based Arc International North America effectively opted out of the CISG (CISG art. 6), any breach of warranty claim the Canadian buyers might have (CISG art. 35), the extent to which any U.S. seller disclaimed any warranty or limited its liability for breaching any warranty (CISG arts. 6 & 35), and the available remedies (CISG arts. 45-52 & 74-78), will be matters for the CISG to resolve.

Meanwhile, on the UNCITRAL Front

Having recently updated you on the status of the various official UCC revisions and amendments (nothing new to report on that front, by the way), I thought it would be worthwhile to take UNCITRAL's pulse and see how the U.N. Conventions on Contracts for the International Sale of Goods (CISG) and on the Use of Electronic Communications in International Contracting (CUECIC) are faring.

Both strike me as profoundly relevant to anyone teaching Contracts, Sales (or a UCC survey course that includes sales), International Sales (or an International Commercial Transactions survey course), or -- at least in the CUECIC's case -- an Electronic Commerce course. The CUECIC's fortunes might also shed some light on the likelihood that the ALI Principles of the Law of Software Contracts will influence contracting practices, contracting disputes, and the evolution of contract law outside the U.S.

CISG

The U.N. first approved the CISG 30 years ago, and it had gathered the requisite ten ratifications and accessions to take effect ("enter into force" to use the U.N.'s terminology) on January 1, 1988. As of June 1, 2010, when Albania's accession entered into force, the CISG was in effect in 74 countries, including Australia, Canada, China, France, Germany, Italy, Japan, Mexico, the Russian Federation and ten of the other fourteen former Soviet republics, Singapore, and South Korea. Great Britain and most of OPEC's member-states are notable non-signatories.

CUECIC

The U.N. General Assembly adopted the CUECIC in November 2005. Despite the International Chamber of Commerce's endorsement, only 18 countries have signed the convention, and none has acceded to, accepted, approved, ratified, or succeeded to it. Consequently, it is not yet in effect anywhere. Moreover, nearly 2-1/2 years have passed since Honduras became the most recent signatory in January 2008. The United States and most of its major trading partners -- excluding China, the Russian Federation, Singapore, and South Korea -- have not signed the CUECIC.

The New Math?

Q: When do 731 + 451 = 38?

A: When the subject is state enactments of Revised Article 7.

I reported earlier this month on recent state enactments of Revised Article 1 and the 2002 amendments to Articles 3 and 4. I didn't forget Revised Article 7; I was simply waiting for definitive action on bills in two states that had made their way to their respective governor's desk, but on which neither governor had yet acted.

Last Thursday (May 27) and Friday (May 28), Florida Governor Charlie Crist and Georgia Governor Sonny Perdue, respectively, signed Florida HB 731 and Georgia HB 451, making Florida and Georgia the 37th and 38th states to enact Revised Article 7. Both enactments will take effect on July 1, 2010.

Additional bills are pending in Massachusetts, Ohio, Washington, and Wisconsin. As of May 28, Massachusetts HB 89 and Ohio HB 490 are showing some signs of life; but Washington SB 5154 and Wisconsin AB 688 do not appear to be going anywhere in 2010.

Mississippi Makes Ten

Mississippi became the tenth state to enact the 2002 amendments to UCC Articles 3 and 4 when Governor Haley Barbour signed SB 2419* into law on April 13. SB 2419 will take effect on July 1, as will Indiana SB 501 (now Pub. L. No. 135-2009), enacted last year with a delayed effective date of July 1, 2010.


* - If SB 2419 looks familiar, it's the same bill by which Mississippi enacted Revised Article 1 -- making it a 1-3-4 bill, which is even more rare than a 1-3-4 double play!

UCC Article 1 Legislative Update

As I predicted in my last legislative update, Mississippi and Wisconsin are the 38th and 39th states to have enacted Revised Article 1.

As introduced on January 11, 2010, Mississippi SB 2419 initially included a choice-of-law provision similar to the original version of Revised § 1-301 that every enacting state has rejected and that the ALI and NCCUSL replaced in 2008. Subsequently amended to replace the introduced version of § 1-301 with language tracking the now-official version, SB 2419 passed the Mississippi Senate on February 10 and the Mississippi House on March 9, and Governor Haley Barbour signed it into law on April 13. Mississippi SB 2419, which adopts uniform Revised § 1-201(b)(20), defining good faith as "honesty in fact and the observance of reasonable commercial standards of fair dealing," takes effect on July 1.

As introduced on January 22, 2010, Wisconsin SB 472 initially included uniform Revised 1-201(b)(20), but was subsequently amended to substitute the pre-revised § 1-201(19) "honesty in fact in the conduct or transaction concerned" definition in existing Wisconsin law. So amended, SB 472 passed the Wisconsin Senate on April 13 and the Wisconsin Assembly on April 22, and Governor Jim Doyle signed it into law on May 12. Wisconsin Act 320 (née SB 472) should take effect on August 1.

As of July 1, the effective date for Mississippi SB 2419 and the delayed effective date for last year's Indiana SB 501 (which I previously discussed here and here), which replaces the existing "honesty in fact in the conduct or transaction concerned" good faith definition in Indiana's version of Revised Article 1 with the uniform Revised 1-201(b)(20) definition, will tilt the balance in favor or uniform Revised 1-201(b)(20) -- as opposed to retaining the pre-revised 1-201(19) definition -- to 28-10 in favor of uniform Revised 1-201(b)(20). When it takes effect on August 1, Wisconsin Act 320 will tilt the balance back slightly to 28-11 in favor of uniform Revised 1-201(b)(20).

UCC Legislative Update

It has been a fairly quiet eight months on the UCC legislative front since my last update.

Revised Article 1

As of March 1, 2010, Revised Article 1 was in effect in thirty-seven states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, and West Virginia.

State legislatures continue to grapple with the definition of "good faith," although the uniform § R1-201(b)(20) definition has the upper hand. Of the 37 enacting states, 26 have adopted the uniform definition, while 11 have retained the pre-revised definition that, in conjunction with § 2-103(1)(b), imposes a different good faith standard on merchants and non-merchants. Effective July 1, 2010, one of those eleven minority states (Indiana) will join the majority as SB 501, enacted in 2009 primarily for the purpose of amending Articles 3 and 4, also revises Ind. Code § 26-1-1-201(19) to require all parties to act honestly and to observe reasonable commercial standards of fair dealing. (At present, Indiana's Revised Article 1 requires only “honesty in fact.”) This change will take effect July 1, 2010, and further tip the balance among enacting states in favor of the unitary good faith definition in uniform R1-201(b)(20).

With many state legislatures occupied with more pressing issues of the moment, 2009 yielded only three new adoptions -- Alaska, Maine, and Oregon -- down from five in 2008, and seven in 2007. While a downward trend in new enactments eventually becomes inevitable once two-thirds of the states have signed on, 2009's three enactments were the fewest in a year since 2003 (when Idaho became the third state overall to enact Revised Article 1).

As of March 1, only two states -- Mississippi and Wisconsin -- appear to be serious candidates to enact Revised Article 1 in 2010.

Mississippi SB 2419, introduced and amended (to replace a choice-of-law provision that appeared to have derived from the original § R1-301 that all 37 enacting states have declined to adopt and the ALI and NCCUSL have disavowed with one that reflected the substitute § R1-301 the ALI and NCCUSL promulgated in 2008) in January, unanimously passed the Mississippi Senate on February 10. It is presently before the House Judiciary Committee.

Wisconsin AB 687, introduced on January 25 and amended on February 16 to replace the uniform R1-201(b)(20) "good faith" definition with the pre-revised 1-201(19) version, received the Assembly Committee on Financial Institutions's unanimous approval on February 26. It is presently before the Assembly Rules Committee.

Two other bills, Massachusetts HB 89 and Washington SB 5155, seem less likely to produce results.

Massachusetts HB 89, the fifth attempt to enact Revised Article 1 in the Commonwealth, was assigned to the Joint Committee on Economic Development and Emerging Technologies on January 20, 2009. No further action had been reported as of March 1, 2010.

Washington SB 5155, introduced on January 15, 2009, appeared to be drawn directly from the language of official Revised Article 1 circa 2001, including the original version of § R1-301. At an initial public hearing on January 23, 2009, all those testifying in support of and in opposition to the bill opposed the choice-of-law provision. The Washington Senate appears to have taken no further action except to "reintroduce and retain [the bill] in present status" on January 11, 2010.


Article 2 and 2A Amendments

As of March 1, 2010, only three state legislatures (Kansas, Nevada, and Oklahoma) have considered bills proposing to enact the 2003 amendments to UCC Articles 2 and 2A. The Kansas and Nevada bills died on the vine.

In 2005, Oklahoma amended Sections 2-105 and 2A-103 of its Commercial Code to add that the definition of “goods” for purposes of Articles 2 and 2A, respectively, “does not include information,” see 12A Okla. Stat. Ann. §§ 2-105(1) & 2A-103(1)(h) (West 2009), and amended its Section 2-106 to add that “contract for sale” for purposes of Article 2 “does not include a license of information,” see id. § 2-106(1). The net effect is similar to having enacted Amended §§ 2-103(k) & 2A-103(1)(n), both of which exclude information from the meaning of “goods” for purposes of Article 2 and 2A, respectively. Otherwise, no state has enacted any of the 2003 amendments.

While the list of states enacting any of the 2003 amendments may not change in the near future, the number of amendments Oklahoma enacts may. Introduced on February 1, 2010, Oklahoma HB 3104 proposes amendments to forty-nine sections of Article 2 and four sections of Article 2A. The bill includes neither the reformulation of Sections 2-206 and 2-207 nor the addition of Sections 2-313A and 2-313B included in the 2003 Article 2 amendments. Many of the amendments appear designed to facilitate electronic signatures and transactions and to accommodate the terminology surrounding them that grows out of UETA, E-SIGN, and Revised UCC Articles 1 and 7, or to otherwise align Article 2 and 2A terminology with that used in Revised Articles 1 and 7. That is not to say that HB 3104 proposes only cosmetic changes to Oklahoma's versions of Articles 2 and 2A. Several of the proposed amendments alter existing substantive rights, obligations, or remedies. Some of those alterations (e.g., raising the § 2-201 floor from $500 to $5,000) do not seem to be inherently controversial; some (e.g., granting/recognizing a right to cure after a justifiable revocation) may or may not be controversial depending on how courts have interpreted the current Article 2; and some (e.g., giving sellers the right to recover consequential damages) do seem inherently controversial. More on this if the bill progresses.


Article 3 and 4 Amendments

As of March 1, 2010, the 2002 amendments to Articles 3 and 4 were in effect in eight states: Arkansas, Kentucky, Minnesota, Nevada, New Mexico, Oklahoma (for a second time), South Carolina, and Texas. They will take effect in Indiana on July 1, 2010.

As of March 1, 2010, the only pending Articles 3 and 4 bill is Massachusetts HB 90, which has been languishing for more than a year.


Revised Article 7

As of March 1, 2010, Revised UCC Article 7 was in effect in thirty-six states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Virginia, and West Virginia.

Additional bills are currently pending in Georgia, Massachusetts, Washington, and Wisconsin; but only the Wisconsin bill appears to be making any progress.

First introduced on February 18, 2009, Georgia HB 451 won unanimous approval in the Georgia House on March 12, and the Senate Judiciary Committee recommended passage on March 26. However, the legislature adjourned on April 3 without a third reading and final action in the senate. HB 451 was "recommitted" to the Georgia Senate on January 11, 2010. No further action has been reported.

Massachusetts HB 89, which also proposes adopting Revised Article 1, was assigned to the Joint Committee on Economic Development and Emerging Technologies on January 20, 2009. No further action has been reported.

Washington SB 5154 was introduced on January 15, 2009, scheduled for a public hearing on January 23, 2009, and then stalled, like its Revised Article 1 counterpart, but without as compelling a reason. It was "reintroduced and retained in present status" on January 11, 2010. No further action has been reported.

Wisconsin AB 688 was introduced on January 25, 2010. On February 22, the Assembly Committee on Jobs, the Economy and Small Business unanimously recommended passage. The bill is now before the Assembly Rules Committee.

Call for Papers: February 2010 Contracts Conference at UNLV

UNLV's William S. Boyd School of Law will host a two-day conference, February 26 & 27, 2010, designed to afford scholars and teachers at all experience levels (including those preparing to enter the academy and those whose primary teaching appointment is not in a law school) an opportunity to present/demonstrate and discuss (formally and informally) recently-published and accepted-but-not-yet-published scholarship, works-in-progress, as-yet-fully-formed ideas for scholarship, and pedagogical innovations, and to network with colleagues -- and potential collaborators or mentors -- from around the country and the rest of the (predominantly) common-law world.

Invitation: We invite paper, presentation, and panel proposals exploring any aspect of contract law, theory, and policy writ large (including, but not limited to, bankruptcy/insolvency, commercial law, consumer law, dispute resolution regimes, family law, insurance law, legal systems, and restitution, in addition to more traditional contract topics) from a behavioral, comparative, critical, doctrinal, economic, empirical, equitable, historical, institutional, interdisciplinary, jurisprudential, pedagogical, philosophical, policy-driven, or political perspective. We also solicit volunteers to serve as moderators or discussants for panels that are not "packaged deals."

The CFPs issued earlier this year for the AALS Section on Contracts' January annual meeting program on New Approaches to Teaching Contracts: A "Teach-In" and the AALS Section on Commercial and Related Consumer Law's January annual meeting program on The Principles of the Law of Software Contracts: A Phoenix Rising from the Ashes of Article 2B and UCITA? each yielded more excellent proposals than either section could accommodate in New Orleans. Both topics remain quite relevant, and I hope to assemble one or more panels on each that will continue the conversations begun in New Orleans. I am also working on the opening plenary, my UNLV colleague Jeff Stempel is organizing a panel on insurance contracts, and Wayne Barnes (Texas Wesleyan) is organizing a panel on comparative contract law and theory. Those efforts, if all bear fruit, still leave room for many more presenters, moderators, and discussants.

We will try to accommodate as many presenters, moderators, and discussants as possible. We particularly encourage junior scholars and those who work in non-U.S. legal systems to propose papers or panels and to volunteer to serve as a discussant or moderator. We also welcome anyone who wishes to attend the conference without presenting or serving as a discussant or moderator. The educational and networking benefits alone are worth the price of admission.

Publication: There is no publication requirement for conference participants, although experience suggests that individual papers and panels often find good homes. The Nevada Law Journal encourages participants to submit individual and panel papers and hopes to publish several works from the conference in upcoming issues.

Likely Attendees: In addition to me, Jeff Stempel, and Wayne Barnes (mentioned above), as of November 18, the following have committed to attend, or expressed a strong desire to attend: Eniola Akindemowo (Thomas Jefferson), Roy Anderson (SMU), Wayne Barnes, Dan Barnhizer (Michigan State), Charles Calleros (Arizona State), Hazel Glenn Beh (Hawaii), Barbara Bucholtz (Tulsa), Gerald Caplan (McGeorge), Miriam Cherry (McGeorge), Carol Chomsky (Minnesota), Karen Cross (John Marshall), Sidney DeLong (Seattle), Larry DiMatteo (Florida, Warrington College of Business), Jay Feinman (Rutgers-Camden), Marjorie Florestal (McGeorge), David A. Friedman (Willamette), Larry Garvin (Ohio State), Danielle Kie Hart (Southwestern), Nicholas Johnson (Fordham), Yong-Sung Jonathan Kang (U. of Washington), Tadas Klimas (Lithuania), Chuck Knapp (UC-Hastings), George Kuney (Tennessee), Peter Linzer (Houston), Charles Martin (Florida Coastal), Jennifer Martin (Oregon), Meredith Miller (Touro), Marcy Peek (Whittier), Joe Perillo (Fordham), Deborah Post (Touro), Michael Pratt (Queen's University/Ontario), Cheryl Preston (BYU), Scott Pryor (Regent), Val Ricks (South Texas), Caprice Roberts (West Virginia), Irma Russell (Tulsa), Adam Scales (Washington & Lee), Andrew Schwartz (Colorado), Sean Scott (Loyola-L.A.), Jeff Stempel, Otto Stockmeyer (Cooley), Howard Walthall (Cumberland), Jarrod Wong (Pacific), and Debbie Zalesne (CUNY). All this without a proper CFP until now. I expect attendance will be at least double this number.

Submitting a Proposal: If you would like to propose a presentation or panel, please e-mail a title, brief description, and any supporting materials by January 4, 2010 to keith.rowley@unlv.edu or snail-mail it to me at 4505 S. Maryland Pkwy., Box 451003, Las Vegas, NV 89154-1003. If you would like to discuss or moderate, please let me know your interests and availability by January 4. We will evaluate proposals as they come in and will consider on a space-available basis any we receive after January 4.

Preliminary Schedule: The conference program will begin both Friday and Saturday morning no later than 9:00 a.m. (grazing and conversational opportunities will start earlier) and will run until 5:00 or 5:30 p.m. each day.

Accommodations: The Hyatt Place next to campus (4520 Paradise Road, Las Vegas, NV 89169) is holding a block of rooms at the rate of $118.00 per night (plus tax). The official deadline for hotel registration at the conference rate is January 25, 2010. However, I encourage you to book sooner, as we blocked a limited number of rooms (due to the The Hyatt Place requiring the law school to guarantee at least 80% occupancy and pay the difference if actual registration was less than we anticipate) and will be more likely to get the Hyatt Place to make the conference rate available to additional attendees if early registration is robust.

To book a conference-rate room at The Hyatt Place, go to http://www.lasvegas.place.hyatt.com/; choose a check-in date no earlier than February 25, 2010 and a check-out date no later than February 28, 2010; enter group code G-BOYD for Boyd School of Law Contracts Conference in the box labeled Group/Corporate #; hit the check availability button; if a room is available, verify that your group name is specified next to rate details and if everything matches, then hit book. If you have trouble booking online, or if you prefer to reserve a room over the phone, please call the hotel at (702) 369-3366.

Transportation: For attendees who stay at the conference hotel, The Hyatt Place provides airport shuttle service and we'll provide transportation between the Hyatt Place and the law school for those not wanting to walk the mile or so. Attendees who prefer to stay on The Strip or elsewhere are responsible for their own transportation.

Sustenance: Your registration fee will cover the costs of lunches both days and a reception and dinner Friday evening, as well as coffee, fruit, and baked goods each morning and cold beverage service and morsels each afternoon. The Hyatt Place also offers a complimentary continental breakfast, which might be particularly attractive to those whose body clocks are on Eastern or Central Time.

Registration: We're still finalizing the conference registration fee and process. The registration fee will be no more than $250. This is higher than past spring contracts conferences. Fortunately, the lower conference hotel rate than at prior conferences, free airport transportation for those staying at the conference hotel, and the relative ease and low cost of flying into and out of Las Vegas's McCarran Airport (which is less than two miles from the hotel) compared to the last three venues, will offset the higher registration fee.

AALS Program and Print Symposium on the Principles of the Law of Software Contracts

The AALS Section on Commercial and Related Consumer Law invites you to attend our Annual Meeting program on The Principles of the Law of Software Contracts: A Phoenix Rising from the Ashes of Article 2B and UCITA? and solicits additional proposals for the companion symposium issue.

The Topic: On May 19, 2009, the ALI approved the Principles of the Law of Software Contracts, which undertake to weave the currently divergent threads of law governing software contracts into a coherent whole that will guide parties in drafting, performing, and enforcing software contracts, assist courts and other arbiters in resolving disputes involving software contracts, and, perhaps, inform future legislation addressing software contracts. Do the Principles clarify the law of software contracts? Will they successfully unify the law of software contracts? Are they consistent with current best practices in software contracting? Will they encourage desirable future developments in the law and practice of software contracts? These are among the questions our program speakers will address.

The Program: Our annual meeting program, scheduled for Saturday, January 9, 10:30 AM to 12:15 PM, in the Magnolia Room, Third Floor, Hilton New Orleans Riverside, will feature Principles Reporter Bob Hillman (Cornell) and Associate Reporter Maureen O’Rourke (Boston U.), who will offer their unique insights on the drafting process, key substantive provisions, and their legal and practical implications; Amy Boss (Drexel), who will add her insights about the failures of the UCC Article 2B project and UCITA and the prospects for the Principles’ success; Juliet Moringiello (Widener), who will discuss her and co-author Bill Reynolds's (Maryland) paper "What's Software Got to Do With It?," offering their perspectives on the Principles process, largely ignoring past efforts and debates, and addressing some of the assumptions underlying the Principles and how they address those assumptions; and Florencia Marotta-Wurgler (NYU), who will discuss her and co-author Yannis Bakos's (NYU Stern School of Business) paper "How Much Does Disclosure Matter?," which delves deeper into the value of disclosure -- an important assumption underlying the Principles and a subject the Principles tackle substantively -- and augments the conceptual discussion with empirical analysis.

The Symposium Issue: The Tulane Law Review will publish a print symposium issue including papers from most of our presenters, papers selected from among those who responded to our initial call for proposals as well as others from whom we solicited contributions, and some shorter responses and replies. We can accommodate a limited number of additional papers, responses, and replies in the symposium issue, which is scheduled to go to press in late summer 2010.

How to Submit a Paper or Proposal: If you would like to contribute to the print symposium, and want your proposal to receive full consideration, please e-mail an abstract, précis, or draft by Monday, December 14, 2009 to Professor Keith A. Rowley, Chair of the AALS Section on Commercial and Related Consumer Law. E-mail: keith.rowley@unlv.edu. We may consider submissions received after December 14 on a space-available basis. Executive Committee members and the Tulane Law Review's symposium editors will review all timely submissions and notify no later than Monday, January 11, 2010 those authors we would like to contribute to the print symposium.

Brooke Overby, 1960-2009

I just received word that our fellow blogger, and my fellow AALS Commercial and Related Consumer Law executive committee member, Brooke Overby died suddenly yesterday evening in Fort Walton Beach, Florida. (Thanks to Brooke's colleague Mark Wessman for passing along the news.) I'll provide more details when they become available.

UPDATE: Elizabeth Nowicki, Brooke's colleague at Tulane, posted her personal tribute on the Concurring Opinions blog. It has attracted additional remembrances from some of Brooke's former professors, classmates, students, other Tulane colleagues, and fellow commercial law professors and scholars.

UPDATE: Tulane Law School posted this memorial today (Aug. 12th). The school is planning a service on Sept. 10th.

ALI Principles of the Law of Software Contracts

Last month, I posted a call for proposals for a program and print symposium on the recently-approved Principles of the Law of Software Contracts. Here's an overview and remarks from Reporter Bob Hillman for the benefit of those who have not already read them on Concurring Opinions or ContractsProf.

Maureen O’Rourke, the Associate Reporter on the Principles of the Law of Software Contracts, and I are posting the following to acquaint readers with the Principles and also to respond to some criticism of one section of the Principles that creates, under certain circumstances, an implied warranty of no known material hidden defects in the software.

On May 19, the membership of the American Law Institute unanimously approved the final draft of the Principles of the Law of Software Contracts. As the Introduction to the project states, the Principles “seek to clarify and unify the law of software transactions.” The Principles address issues including contract formation, the relationship between federal intellectual property law and private contracts governed by state law, the enforcement of contract terms governing quality and remedies, the meaning of breach, indemnification against infringement, automated disablement, and contract interpretation.

The Introduction to the Principles explains further that “[b]ecause of its burgeoning importance, perhaps no other commercial subject matter is in greater need of harmonization and clarification. . . . [T]he law governing the transfer of hard goods is inadequate to govern software transactions because, unlike hard goods, software is characterized by novel speed, copying, and storage capabilities, and new inspection, monitoring, and quality challenges.” Many of the rules of Article 2 of the UCC therefore apply poorly to software transactions or not at all, and the Principles are intended to fill the void.

The Principles are not “law,” of course, unless a court adopts a provision. Courts can also apply the Principles as a “gloss” on the common law, UCC Article 2, or other statutes. Nor do the Principles attempt to set forth the law for all aspects of a transaction, but instead rely on sources external to the Principles in many areas.

The Principles apply to agreements for the transfer of software or access to software for a consideration, i.e., software contracts. These include licenses, sales, leases, and access agreements. The project does not apply to the exchange of digital media or digital databases. It applies a predominant purpose test to determine applicability to transactions involving embedded software or software combined in one transfer with digital media, digital databases, and/or services.

We are the Reporter and Associate Reporter of the software principles. We have been greatly aided by our advisors, consultative group members, ALI Council members, liaisons from the National Commissioners on Uniform State Law, Business Software Alliance, and the American Bar Association, and many additional lawyers from industry and other groups who, over the last five and one-half years, have met with us, talked with us on the phone, and exchanged e-mails with us. We believe the project moved along smoothly largely because of the efforts of all of these groups and individuals.

Nevertheless, in the two weeks leading up to approval in May, we received communications from a few software providers evidencing concern largely with one section of the Principles. Section 3.05(b) creates a non-excludable implied warranty that the software “contains no material hidden defects of which the transferor was aware at the time of the transfer.” The section only applies if the transferor receives “money or a right to payment of a monetary obligation in exchange for the software.” Because the section may be the most controversial provision, we devote the rest of this post to the issue.

Despite concerns that section 3.05(b) creates “new law,” it simply memorializes contract law’s disclosure duties and tort’s fraudulent concealment law. The section makes clear that these rules apply to software transfers in order to allocate the risk to the party best able to accommodate or avoid the costs of materially defective software. Obviously this is the transferor in situations where only it knows of the material defect and the transferee cannot protect itself. The section requires that the transferor knows of the defect at the time of the transfer (negligence in not knowing is not enough to trigger liability), the defect is material, and it is hidden.

A few software providers have concerns that the concepts of “hidden,” and “material defect” are obtuse and will “increase litigation” or require a flood of “detailed notices” to prospective users. These concepts, however, are hardly unknown to the law. A comment to section 3.05(b) says that a “hidden” defect occurs if the “defect would not surface upon any testing that was or should have been performed by the transferee.” This is nothing new. See, e.g., UCC 2-316(3)(b) (“there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to [the buyer]”).

A few software providers also worry about the meaning of “material defect.” The comments to section 3.05(b) point out that the section simply captures the principle of material breach: Does the defect mean that the transferee will not get substantially what it bargained for and reasonably expected under the contract? The criticism that “materiality” is too vague, if accurate, would mean that contract law would have to abolish its material breach doctrine too.

Putting together the requirements of actual knowledge of the defect at the time of the transfer, that the transferee reasonably does not know of the defect, and that the defect constitutes a material breach means that a transferor would be insulated from liability in situations identified by the concerned software providers as problematic. These include where the transferor has received reports of problems but reasonably has not had time to investigate them, where the transferee’s problems are caused by uses of which the transferor is unaware, where the transferor learns of problems only after the transfer, and where the problems are benign or require reasonable workarounds to achieve functionality. The best example of when section 3.05(b) would apply is, as comment b to the section says, where the transferor already knows at the time of the transfer that the software will require “major workarounds . . . and cause[] long periods of downtime or never [will] achieve[] promised functionality,” the transferee cannot discover this for itself, and the transferor chooses not to disclose the defect.

As we have already said, the section simply memorializes existing law. Under the common law, a contracting party must disclose material facts if they are under the party’s control and the other party cannot reasonably be expected to learn of the facts. Failure to disclose in such circumstances may amount to a representation that the facts do not exist and may be fraudulent. See, e.g., Shapiro v. Sutherland, 76 Cal. Rptr. 2d 101, 107 (Cal. Ct. App. 1998) (“Generally, where one party to a transaction has sole knowledge or access to material facts and knows that such facts are not known or reasonably discoverable by the other party, then a duty to disclose exists.”); Hill v. Jones, 725 P.2d 1115, 1118-19 (Ariz. Ct. App. 1986) (“[U]nder certain circumstances there may be a ‘duty to speak.’ . . . [N]ondisclosure of a fact known to one party may be equivalent to the assertion that the fact does not exist. . . . Thus, nondisclosure may be equated with and given the same legal effect as fraud and misrepresentation.”). The Restatement (Second) of Contracts section 161(b) states that “[a] person’s non-disclosure of a fact known to him is equivalent to an assertion that the fact does not exist . . . where he knows that disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party is making the contract and if non-disclosure of the fact amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing.” Section 161, comment d of the Restatement (Second) adds “In many situations, if one party knows that the other is mistaken as to a basic assumption, he is expected to disclose the fact that would correct the mistake. A seller of real or personal property is, for example, ordinarily expected to disclose a known latent defect of quality or title that is of such character as would probably prevent the buyer from buying at the contract price.”

One concern of a commentator is that fraudulent concealment is a tort, implying that it has no place in the Principles. But the principle appears prominently in the Restatement (Second) of Contracts section 161. And why not memorialize a principle that discourages a party in a contract setting from hiding material facts that the other party reasonably does not know? The commentator notes that fraudulent concealment requires intent to deceive, but wouldn’t that be the usual inference if a transferor licenses software it knows is materially defective and knows the transferee cannot discover it?

A few organizations also are concerned that section 3.05(b) cannot be disclaimed. But there are plenty of cases that do not allow a party to contract away liability for concealment. One critic wonders why a statement such as “I am not giving any assurances about there being no defects in this software,” should not insulate a transferor from liability. A reasonable licensee, assuming the good faith of the licensor, would believe that this licensor does not intend to make any express warranties or implied warranties of merchantability or fitness, not that the licensor knows that the software is materially defective so that the software will be largely worthless to the licensee. A transferor playing this game is surely in bad faith and, frankly, engaging in reprehensible conduct. But there is a way to ensure no liability under this section, namely to disclose material hidden defects. In effect, disclosure is the disclaimer.

Bob Hillman and Maureen O’Rourke
June 2, 2009

The Concurring Opinions post -- which Bob asked me to re-post, with the blessings of the Concurring Opinions folks -- has provoked several comments and has been the subject of a follow-up post by David Hoffman, one of Concurring Opinions's regular contributors. Dave's post has generated its own comments. While we here at Commercial Law might have a vested interest in generating site traffic, it may be more efficient to funnel feedback through a single conduit. Because Concurring Opinions got the ball rolling, feel free to comment, or to respond to existing comments, there.

Mid-Year Legislative Update

With most state legislatures having concluded their business for the year, here is the 2009 mid-year legislative update.

Revised Article 1

As of January 1, 2009, Revised Article 1 was in effect in thirty-four states: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, and West Virginia.

Notwithstanding my suggestion elsewhere that the promulgation of a substitute § R1-301 might “grease the skids” for additional enactments, 2009 has turned out to be a relatively quiet legislative year for Revised Article 1, with only three enactments – down from five in 2008, and seven in 2007. While the most noteworthy nonuniformity among the thirty-seven enactments remains the definition of “good faith” – with 26 states having adopted the uniform § R1-201(b)(20) definition and 11 having retained the pre-revised definition that imposes a different good faith standard on merchants and non-merchants – all three 2009 enactments adopt the uniform definition and one of the eleven states (Indiana) that retained the pre-revised definition has amended its version of Revised Article 1 to adopt the uniform definition effective July 1, 2010.

As of June 26, Alaska (HB 102), Maine (LD 1403), and Oregon (SB 558) have enacted Revised Article 1 thus far this year. The Alaska and Oregon enactments take effect on January 1, 2010, with Maine’s following on February 15, 2010.

The Washington legislature failed to act on SB 5155 before adjourning sine die on April 26. (That’s probably just as well, because the introduced version of SB 5155 appeared to be drawn directly from the language of official Revised Article 1 circa 2001 and included the no-longer-official version of Revised 1-301 that all 37 enacting states have declined to adopt).

It is possible that the Massachusetts legislature will consider a Revised Article 1 bill sometime this year; however, having waited months for HD 89 to be assigned a bill number, and given the failure of four prior bills to garner a floor vote in either chamber, I would be surprised to see definitive action anytime soon.

Article 2 and 2A Amendments

As of June 26, 2009, only three state legislatures (Kansas, Nevada, and Oklahoma) had considered bills proposing to enact the 2003 amendments to UCC Articles 2 and 2A. In 2005, Oklahoma amended Sections 2-105 and 2A-103 of its Commercial Code to add that the definition of “goods” for purposes of Articles 2 and 2A, respectively, “does not include information,” see 12A Okla. Stat. Ann. §§ 2-105(1) & 2A-103(1)(h) (West Supp. 2008), and amended its Section 2-106 to add that “contract for sale” for purposes of Article 2 “does not include a license of information,” see id. § 2-106(1). The net effect is similar to having enacted Amended §§ 2-103(k) & 2A-103(1)(n), both of which exclude information from the meaning of “goods” for purposes of Article 2 and 2A, respectively. Otherwise, no state has enacted the 2003 amendments.

Article 3 and 4 Amendments

As of January 1, 2009, the 2002 amendments to Articles 3 and 4 were in effect in six states: Arkansas, Kentucky, Minnesota, Nevada, South Carolina, and Texas. However, by July 1, 2010, that number will increase by at least 50%.

As of June 26, Indiana (SB 501), New Mexico (SB 74), and Oklahoma (SB 991) have enacted the 2002 amendments to Articles 3 and 4 thus far this year. Oklahoma SB 991 will take effect on November 1, 2009; New Mexico SB 74 will take effect on January 1, 2010; and Indiana SB 501 will take effect on July 1, 2010.

In addition to enacting the 2002 amendments to Articles 3 and 4 and the usual conforming amendments, Indiana SB 501 also revises the definition of “good faith” in Ind. Code § 26-1-1-201(19) – Indiana’s counterpart to UCC § 1-201(b)(20) – to require all parties to act honestly and to observe reasonable commercial standards of fair dealing. At present, Ind. Code § 26-1-1-201(19) requires only “honesty in fact.”

Revised Article 7

As of January 1, 2009, Revised UCC Article 7 was in effect in thirty-one states: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maryland, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Virginia, and West Virginia. As of July 1, Revised Article 7 will be in effect in South Dakota, as well.

This has been a relatively active legislative year for Revised Article 7. In addition to South Dakota SB 89, which will be in effect by the time you read this, Alaska (HB 102), Maine (LD 1405), and Oregon (SB 558) have already enacted Revised Article 7 in 2009, and Louisiana HB 403 lacks only Governor Bobby Jindal's signature (or pocket veto). Alaska HB 102 and Oregon SB 558 will take effect on January 1, 2010, as will Louisiana HB 403 (if enacted). Maine LD 1405 will take effect on February 15, 2010.

Georgia HB 451 made significant progress toward adoption. First introduced on February 18, the Georgia House unanimously passed the House Judiciary Committee’s substitute version on March 12, and the Senate Judiciary Committee recommended passage on March 26. However, the legislature adjourned on April 3 without a third reading and final action in the senate.

Washington SB 5154 stalled, like its Revised Article 1 counterpart, but without as compelling a reason.

UETA

While the Georgia legislature did not pass HB 451 prior to adjourning, it did pass the Uniform Electronic Transactions Act (HB 126), to which Governor Sonny Perdue affixed his signature on May 5. As a result, effective July 1, 2009, Illinois, New York, and Washington will be the only states in which UETA is not in effect.

Call for Proposals

Call for Proposals
AALS Section on Commercial and Related Consumer Law

“The Principles of the Law of Software Contracts:
A Phoenix Rising from the Ashes of Article 2B and UCITA?”

2010 AALS Annual Meeting, New Orleans, Louisiana

The Executive Committee of the AALS Section on Commercial and Related Consumer Law invites proposals for the Section’s 2010 AALS Annual Meeting program and a print symposium to follow on the topic “The Principles of the Law of Software Contracts: A Phoenix Rising from the Ashes of Article 2B and UCITA?”

The Topic: Contracts concerning computer software have presented difficult legal issues for many years. Although software is often bought and sold like goods, software contracts do not fit easily into the sale of goods rubric of Uniform Commercial Code Article 2. In the 1990s, the American Law Institute (ALI) and the National Conference of Commissioners on Uniform State Laws (NCCUSL) sought to address special issues concerning software contracts by developing a new UCC Article 2B. This effort failed because of fundamental disagreements about the substance of important rules. NCCUSL (now known as the Uniform Law Commission, or ULC) then carried forward the project on its own and, in 1999, promulgated the Uniform Computer Information Transactions Act (UCITA), providing a comprehensive (and controversial) set of rules for licensing computer information. To date, only Maryland and Virginia have enacted UCITA, and the ULC has ceased promoting additional enactments.

A new software contracts project has emerged in Article 2B’s and UCITA’s wake: the Principles of the Law of Software Contracts. On May 19, the ALI approved the Principles, which undertake to weave the currently divergent threads of law governing software contracts into a coherent whole that will guide parties in drafting, performing, and enforcing software contracts, assist courts and other arbiters in resolving disputes involving software contracts, and, perhaps, inform future legislation addressing software contracts. Do the Principles clarify the law of software contracts? Will they successfully unify the law of software contracts? Are they consistent with current best practices in software contracting? Will they encourage desirable future developments in the law and practice of software contracts? These are among the questions we hope our program speakers and symposium contributors will address.

The Program: Principles Reporter Bob Hillman (Cornell) and Associate Reporter Maureen O’Rourke (Boston U.) will offer their unique insights on the Principles’ drafting, key substantive provisions, and their legal and practical implications. Amy Boss (Drexel), who was intimately involved with both Article 2B and UCITA and has been an adviser on the Principles, will add her own insights about the prior efforts’ failures and the prospects for the Principles’ success. We seek one or more additional speakers who will offer their perspectives on the Principles, the economic, historical, policy, and political forces that motivated and shaped them, and their likely impact on the law and practice of software transactions.

The Symposium: We are working to identify a law review that will provide the best outlet in the which to publish papers from our presenters as well as a number of additional papers from those who respond to this call for proposals and others from whom we are soliciting contributions. In addition to contributions from a broader cross-section of legal scholars than we can offer the opportunity to speak at the annual meeting, we hope that the print symposium will also include articles from interested judges, practitioners, and others. We currently anticipate that finished papers would be due in late spring or summer 2010 for publication in late 2010 or early 2011.

How to Submit a Proposal: If you would like to present or contribute, please e-mail an abstract, précis, or draft by August 29, 2009 to Professor Keith A. Rowley, Chair of the AALS Section on Commercial and Related Consumer Law. E-mail: keith.rowley@unlv.edu. The Executive Committee will review all submissions and notify by October 1, 2009 those we would like to present their topics at the annual meeting and those additional authors we would like to contribute to the print symposium.

Oops!

Law.com reports that Bank of America and Citibank stand to lose in excess of $51 million because Bank of America, acting on its own behalf and as Citibank's agent, terminated both banks' financing statements against the former law firm of Heller Ehrman in August 2007, some 14 months before Heller Ehrman filed bankruptcy. As we all know, UCC § 9-317(a)(2) and 11 U.S.C. § 544(a)(1), collectively, generally give a bankruptcy trustee (or a debtor-in-possession) priority over any security interests that were unperfected when the debtor filed bankruptcy. That's bad enough news for Bank of America's and Citibank's apparently unperfected-at-filing security interests. (Bank of America and Citibank have argued that an October 2008 "correction" revived their perfection well before Heller Ehrman filed bankruptcy and had the effect of making the banks perfected when Heller Ehrman paid them. Heller Ehrman counters that the "correction" did not cure the banks' lapse in perfection.)

But, wait, it appears to get worse. Less than 90 days before Heller Ehrman filed bankruptcy, and well after Bank of America terminated its and Citibank's filings, Heller Ehrman paid the banks $51 million of the firm's outstanding debt. Under 11 U.S.C. § 547(b), the payment looks like an avoidable preference, which the banks may have to refund to the bankruptcy estate.

With Pillsbury Winthrop Shaw Pittman on one side and Greenberg Traurig on the other, this dispute figures to be hotly contested and should be interesting to follow.

(Hat tip to Scott Burnham.)

2009 AALS Commercial and Related Consumer Law Section Officers

At last week's AALS annual meeting in San Diego, those attending the AALS Section on Commercial and Related Consumer Law's Friday business meeting voted our own Keith A. Rowley (UNLV) to be the section's chair-elect and fellow blogger A. Brooke Overby (Tulane) to be an at-large member of the section's executive committee. Amelia H. Boss (Drexel) is the new section chair and immediate past chair Kevin E. Davis (NYU) and at-large members Neil B. Cohen (Brooklyn) and Gregory E. Maggs (GWU) round out the executive committee.

UPDATE: The AALS informed us that Amy Boss was ineligible to serve this year because Drexel is not yet a member school. Consequently, Keith Rowley becomes chair a year earlier than planned, Greg Maggs is the chair-elect, and Emily E. Kadens (Texas) is our new at-large member.

AALS Workshop on Transactional Law

You may want to mark your calendars for next June's AALS Workshop on Transactional Law, June 10-12, in scenic Long Beach, California. If you go, keep your eyes open for flying buses and '67 Shelby GTs. (Both scenes are set in or entering Long Beach; and yes, the dialogue in the second one is in Espanol.) The workshop is part of the AALS Mid-Year Meeting. Program details are not yet available on the AALS web site. However, the November AALS News provides the following description, as well as a list of topic and speakers and registration information that you can access by clicking this link.

“Transactional law” refers to the various substantive legal rules that influence or constrain planning, negotiating, and document drafting in connection with business transactions, as well as the “law of the deal” (i.e., the negotiated contracts) produced by the parties to those transactions. Traditionally, the law school curriculum has emphasized litigation over transactional law. However, many modern lawyers serve corporate clients, and a significant percentage of lawyers engage in some form of transactional practice. Hence, law schools must place greater emphasis on training law students to be transactional lawyers, and should support law faculty engaged in scholarship focused on transactional law. To this end, in 1994, the AALS held a workshop on the transactional approach to law, which sparked experimentation and innovation in teaching and scholarship related to transactional law. Since that time, there have been significant developments in transactional law. This Workshop not only will take stock of those developments, but also will enable participants to gain some in-depth perspective regarding the relative benefits and drawbacks of those developments.

Law schools have attempted to respond to the demand for increased transactional training in a variety of ways, from integrating transactional law into traditional law school courses to developing stand alone “Deals” or “Business Planning” courses. A number of law schools have developed innovative programs in transactional law. This Workshop will enable participants to discuss specific methods of teaching transactional skills with an eye towards ferreting out best practices. Should professors interested in teaching transactional law focus on substantive law, “transactional skills,” (i.e., planning, negotiating, and drafting), economic or other theories of business transactions, or all of the above? Should transactional skills be taught in separate courses or integrated into substantive courses? If taught in separate courses, should such courses be part of the first-year curriculum, integrated throughout the three years, or focused on the upper-level curriculum? How do you modify or supplement the traditional case method to teach students useful transactional skills? The Workshop also will explore the challenges and benefits that arise for those who write or would like to write transactional scholarship. And as initial matter, the Workshop will address how best to define “transactional scholarship” in a way that accurately captures the potential breadth and depth of transactional law, and how transactional scholarship differs from traditional legal scholarship.

The Workshop also will explore best practices for writing scholarship in this area, including methodologies for researching the legal, financial and practical effects of various corporate transactions. The Workshop will feature concurrent works-in-progress sessions, enabling participants to exchange ideas and insights regarding new scholarship related to transactional law.

One important goal of the Workshop is to bring together faculty from different doctrinal areas of law, including faculty who teach in the clinical setting. Transactional law touches many substantive areas of law, and it is closely identified with bankruptcy, business associations, contracts, commercial law, intellectual property, labor and employment law, securities regulation, and taxation. The Workshop will provide a unique opportunity for faculty members to make connections between their primary fields and transactional law, and thus should appeal to a broad spectrum of scholars and teachers.

Dick Speidel Tribute at AALS Annual Meeting

Northwestern University School of Law and the University of San Diego School of Law are hosting a reception at the AALS Annual Meeting in San Diego on Friday, January 9, from 6:30 to 8:30 p.m. in the Warner Center Room, 4th floor, south tower of the San Diego Marriott Hotel & Marina, honoring the career of Richard Speidel, who passed away this past semester. Dick was a major figure in contracts, commercial law, and international arbitration.

A short program, featuring remarks by Professors Jim White (Michigan) and Bob Summers (Cornell), Dick's long-time collaborators, and Deans Kevin Cole (San Diego) and David Van Zandt (Northwestern), will begin at 7:00 p.m. The organizers will also videotape remarks from those who knew Dick or his work and will provide a copy to Dick's family.

UCC Legislative Update

Nearly three months after both houses of the Illinois legislature passed SB 2080, Governor Rod Blagojevich signed it into law on August 22, making Illinois the 34th state to enact Revised UCC Article 1 and the 31st state to enact Revised UCC Article 7.

As have all thirty-three prior state enactments, and consistent with the ALI's and NCCUSL's promulgation earlier this year of a substitute for the original version of uniform R1-301, Illinois Public Act 95-0895 (neé SB 2080) rejects the 2001 uniform version of R1-301 in favor of language generally tracking its version of pre-revised 1-105. Act 95-0895 also rejects the uniform good faith definition in R1-201(b)(20), joining Alabama, Arizona, Hawaii, Idaho, Indiana, Nebraska, Rhode Island, Tennessee, Utah, and Virginia in opting to retain the bifurcated good faith standard of pre-revised 1-201(19) and 2-103(1)(b).

Act 95-0895 will take effect January 1, 2009.

In Memoriam: Richard E. Speidel (1933-2008)

The fields of contracts and commercial law (as well as ADR) lost an important scholar and a wonderful gentleman Saturday. At the time of his death, Dick Speidel was the Beatrice Kuhn Professor Emeritus at Northwestern University School of Law and a half-time professor at the University of San Diego School of Law. A longtime collaborator of James J. White and Robert Summers, with whose UCC hornbook and treatise I assume all our readers are familiar, Dick served from 1991-1999 as reporter for Revised UCC Article 2 — an experience he recounted in Revising UCC Article 2: A View from the Trenches, 52 Hastings L.J. 607 (2001). Among his many other books and articles are Studies in Contract Law (7th ed. 2008), which he co-authored with Ian Ayres (and previously with the late Edward J. Murphy), Commercial Transactions: Sales, Leases, and Licenses (2d ed. 2004), which he co-authored with Linda J. Rusch (who served from 1996-1999 as associate reporter for Revised Article 2).

USD Law Dean Kevin Cole posted this brief tribute.

Waiting for SB 2080

Both chambers of the Illinois legislature passed SB 2080 on May 31, 2008. Taking advantage of most of the 30 days the Illinois Constitution affords the legislature to present a passed bill to the governor, see Ill. Const. art. IV, § 9(a), SB 2080 was sent to Governor Rod Blagojevich on June 27, 2008. As of July 30, 2008, Governor Blagojevich has neither signed nor vetoed SB 2080. If this were legislation Congress forwarded to President Bush or that most state legislatures forwarded to their respective governors, SB 2080 would by now be deemed enacted by passage of time. However, the Illinois Constitution affords the governor 60 days to sign or veto a bill before it is deemed enacted without the governor's action. See Ill. Const. art. IV, § 9(b). So, while the bills enacting Revised Article 1 in Pennsylvania (also enacting Revised Article 7), South Dakota, Tennessee, and Vermont this year have all taken effect since the Illinois General Assembly passed SB 2080, Illinois's incipient enactment of Revised Articles 1 and 7 continues to idle. (Hopefully, unlike Godot, SB 2080 will eventually arrive.)

If enacted, SB 2080 will make Illinois the thirty-fourth state to have enacted Revised Article 1 and the thirty-first state to have enacted Revised Article 7.